Timothea Horwell | July 25 2020
Timothea Horwell | July 25 2020
Timothea: Hey Johnny, it’s a huge privilege to have you here! Can you please introduce yourself, and KuCoin, to the Orion community?
Johnny: Hello everyone! This is Johnny from KuCoin. I am currently the CEO of KuCoin Global and in charge of our key products KuCoin, KuCoin Futures, Pool-X. I joined KuCoin two years ago as the co-founder and since then I have been in charge of BD, listing, and investment at KuCoin. Before joining KuCoin, I used to work in the auto and luxury industries for many years.
KuCoin started in September 2017, almost the same time with Binance, and we are now one of the most popular crypto exchanges. We now have over 5 million registered users from 200+ countries and regions. KuCoin is often known for a wide range of tradable digital assets. We now have over 200 tokens with about 450 trading pairs. Also, KuCoin is favored by many users as we are offering a number of crypto-related financial services: fiat-to-crypto, crypto-to-crypto, futures, staking, lending, token sale and so forth. At KuCoin, we all believe in the future of crypto, and our ultimate goal is to drive the mass adoption of crypto and blockchain technology.
Timothea: Rather than for optics, it’s been a focus of ours to ensure our partnerships have a common goal - building a sustainable future of the space - so it's great to have you on board. Alexey has been a big proponent of that too. For those in the community who haven’t yet had the chance to hear from you, Alexey, can you please introduce yourself?
Alexey: I’m Alexey Koloskov, Orion Protocol’s CEO and Co-Founder, and my background spans the two worlds of traditional finance and DeFi. I started my journey in the crypto space in 2016 as Chief Architect and Creator of the Waves DEX - the most successful decentralized exchange to date. Prior to this, I spent years creating software for some of the largest international banks (including Deutsche Bank and UniCredit).
Now, I’m incredibly proud to be leading the Orion team in building what we believe will be the future of crypto. As Timothea mentioned, integral to our development and success will be through establishing strong partnerships with key entities in the space. KuCoin is one of them!
Timothea: Hugely proud to be part of the team too! On that, it seems the KuCoin team is working on a huge number of initiatives at the moment. It would be great to understand your main points of focus for the year ahead. Can you please shine some light on these?
Johnny: In this industry, we are always looking at more promising defi projects from time to time due to market demand, and KuCoin always reacts quickly to this. In short, Kucoin will be focusing more towards supporting more defi projects such as Orion. To discover more hidden gems in the DeFi field, we launched the KuCoin Choice Community Vote DeFi Session, and we are incredibly excited to see that Orion won the first voting with almost 10,000 votes, and has been listed on KuCoin today.
Timothea: Likewise, looking forward to seeing that same kind of energy from the community today at 10am UTC. Let’s expand on your DeFi initiatives. As a DeFi platform, DeFi's progression is, of course, of huge importance to us and our community. Johnny, as a centralized exchange, can you tell us more about how KuCoin fits into this movement, and the role centralized entities like yourself play in establishing DeFi?
Johnny: With the help of Orion, we are bringing our centralized liquidity to the DeFi community. As a centralized exchange, we are happy to empower more DeFi projects, and with the various product lines of KuCoin, we will be able to do this in multiple ways. For instance, bringing liquidity to the project with token listings on KuCoin, offering staking service of DeFi token on Pool-X, acting as a node for the project or integrating KCS with the DeFi service. And we are exploring the possibility of integrating CeFi and DeFi on our platform. In addition, we have plenty of efforts to contribute to the DeFi ecosystem and KuChain will be an important platform for that.
Timothea: And Alexey, with your experience across both traditional finance and DeFi, what do you see as the current barriers to DeFi expansion?
Alexey: To us, the most important factor in the decentralized/centralized divide is liquidity. Countless projects have arisen to provide traders with decentralized access to liquidity while maintaining ownership of their assets, but many DEXes lack the liquidity, trading pairs, user experience, and features that traders are looking for - in comparison to CEXes.
I see this divide between centralized/decentralized entities as one of the one of the biggest barriers to DeFi expansion. While we are a DeFi platform absolutely, we understand that the majority of liquidity (~98%) exists on centralized exchanges. Via our liquidity aggregator protocol, I believe we’re overcoming this barrier - bridging the gap between the centralized and decentralized worlds of crypto. We’re building on decentralized technologies in the most critical parts of the system like custody and final settlement, while pulling liquidity from the major players in market — centralized exchanges.
Timothea: Looking further ahead, how do you both envision the future of crypto in regards to the two worlds of centralization and decentralization? Will the future be decentralized, siloed into two opposing forces, or an amalgamation of the two?
Johnny: Orion Protocol brings us hope for a more connected future, acting as the connector between centralized exchanges and the DeFi community, where they allow CEX to transcend into the defi space seamlessly, or without any additional effort or additional costs to us. Personally I am pretty in favor of decentralization and our team members in KuCoin share the same values for decentralization. While I do not think the relationship between decentralization and centralization will be like one replaces another completely. They both have their advantages and meet the needs of certain target groups. Just like the discussion between CEX and DEX. Will more people trade on DEX in the future, yes absolutely, but does that mean CEX will disappear? Not really.
Alexey: I agree with Johnny here. As I touched on in terms of our own mission, I too believe the near future will not be one or the other, but an amalgamation of the two - capitalizing on the strengths from both sides. What’s important to us is providing access to the benefits and opportunities of the crypto landscape, but in a totally decentralized way. We’re here to decentralize centralize liquidity.
Let’s move on to my next series of questions. It was an honor for Orion to take part in the first KuCoin community choice vote of ‘DeFi Project with the Most Potential’ - having previously led both the listing and strategic investment teams, what does ‘potential’ look like to you?
Johnny: To me, potential blockchain projects have the ability or at least possibility to bring blockchain technology to the masses, revolutionizing traditional industries like finance, logistics, healthcare and more. A new type of decentralized liquidity aggregation protocol like Orion can effectively integrate with all exchanges, bridging the gap between centralized and decentralized as I mentioned above. We believe this idea not only leverages the blockchain technology smartly, but also has real business impact.
Alexey: Hugely appreciate the support from you and the KuCoin team here, Johnny. To add from a personal perspective, we’d paid close attention to our predecessors, and one of the main causes of failure is the lack of substantial revenue streams - despite what potential a company may have.
That’s why we’ve identified and are working on a number of products that will generate revenue in the near future. We’re bringing in thirteen B2B and B2C revenue streams from day one, across our entire platform, ensuring sustainability as a business. We want to go beyond potential, to build not only a sustainable business but the future of crypto.
Timothea: Absolutely. So, beyond listing, I’m personally very excited for this partnership and so are our community. Can you tell the community any future plans for collaboration between KuCoin and Orion?
Johnny: There can be plenty of collaboration between Orion and our public chain KuChain in the future, and we are highly excited about it! As mentioned, KuChain is built to empower the open finance industry. Therefore, KuChain and its testnet Kratos builds a four-layer network based on the needs of DeFi and DEX, modularizes the protocol and functions, improves the ease of use of public blockchain, reduces the threshold for developer participation, and solves the problems in the DeFi field. We understand Orion is chain-agnostic, and we look forward to exploring possible integrations with Kuchain into various aspects of the protocol.
In the future, we will also provide support like LSP for more DeFi players such as Orion, especially DEX. We are hoping at least 100 DEX and DeFi services can be run on KuChain in the near future and all of them can share the liquidity easily - through Orion’s aggregated orderbooks.
Alexey: Absolutely, our partnership goes well beyond listing, and we’re open to taking it further still. To add to the above, we’re excited to announce that KuCoin will soon be joining the Orion Broker Network. Our broker network (or Decentralized Brokerage) is what underpins our entire ecosystem, and we’re incredibly excited for KuCoin to be joining as a founding broker - adding immense value to our ecosystem.
Timothea: In my opinion, the broker aspect you mentioned is one of the most interesting areas of this partnership. With a number of announcements on this recently, many of the community will be aware this is an initiative that we’re rolling out with exchanges, OTC desks, and market makers ahead of our Main Net launch. But what exactly does it mean for KuCoin to be joining as a founding broker?
Alexey: To understand this partnership fully, it’s important to understand the governance mechanism underpinning our ecosystem: Delegated Proof of Broker. It fulfills every function on the protocol via our decentralized brokerage with ORN at its core. The decentralized brokerage is a network of third-party brokers chosen to carry out all transactions on the platform. Brokers run Orion Broker Software, automatically executing trades routed from Orion's liquidity aggregator.
To prevent monopolies from forming and to ensure the protocol remains democratic, Orion has built into the network non-broker stakers who stake ORN to vote for their choice of broker - choosing brokers based on the dynamic reward share offered. Brokers are incentivized to offer attractive rates to non-broker stakers to grow their stake and increase their chance of being chosen.
KuCoin joining as a founding broker brings immense value to Orion users. KuCoin will enrich the Orion ecosystem with increased liquidity for spot trading, margin trading, leveraged ETF and contract trading services, as well bringing as a large and valuable community for PoS staking services.
This partnership is mutually beneficial too - joining as a broker will enable KuCoin to monetize idle assets and offer a decentralized solution to their centralized orderbooks.
Timothea: Glad to have had this AMA as an opportunity to make this announcement! More coming on this soon to explain the incredible value KuCoin can bring to our ecosystem. Let's move onto pre-staking. Earlier this week we announced ORN’s pre-staking on KuCoin’s Pool-X. Johnny, you launched this program just a few months ago - what are your objectives with the program, vs. other staking propositions in market? And how does ORN fit into that?
Johnny: Orion is one of our premier DeFi projects running on Pool-X. With an annual APR of 39%, we see this as a rising star in our staking services. Pool-X positions itself as an exchange that provides liquidity with staked crypto. For the staking economy, the biggest risk is the liquidity risk. Like for a user who’s using any staking service, once his token has been staked, he cannot withdraw it freely as there is always a redemption period. Take ATOM as an example, the period is always 21 days, which means you can only get your token back in 21 days and in this period, you cannot get any staking rewards. If the price of the token is dumped in the 21 days, your loss will be more severe.
Pool-X solves the liquidity risk by introducing the world’s first liquidity market, where you can easily trade your staked assets with their unstaked counterparts. Getting the same amount of token that can be traded immediately. The transaction is instant and the fee is super low.
Timothea: Great, with that context in mind let’s dive a little deeper into ORN’s pre-staking initiative itself. Alexey, what exactly is ‘pre-staking’ and what does it look like for ORN holders? How does it differ from ‘staking’?
Alexey: Our whole tokenomics was built around creating unrivalled benefits for token holders, and that goes beyond the sale. We wanted to provide immediate staking incentives to ORN token holders, that are traditionally only made available to developers and validators for testing of the network performance and robustness.
As a result, the pre-staking initiative was launched to facilitate and incentivize staking of ORN prior to public Main Net launch in Q4 (at this point, we’ll introduce our own internal staking program). Through a lucrative multi-exchange pre-staking program, Orion Protocol’s ORN token can now be staked at a 39% est. APR. This initiative was built to leverage the unique staking infrastructure of our exchange partners to test tokenomics, in a real market environment where token holders and liquidity of the token can both affect network stability and stake ratio.
Timothea: With just a few days since ORN staking on Pool-X launched, can you share any insight into how it has been received so far, pre-listing?
Johnny: After the launch of ORN staking service on Pool-X on July 22, with an annualized return of 39%, over 225k ORN tokens had been staked with us in 24 hours. Very impressive for us to see the power of the Orion community so quickly, which we hope to see continue via a highly successful listing later today.
Alexey: The stats we received from the team less than 24 hours after the program launched were incredibly impressive - particularly given ORN won’t be listed on KuCoin until a few hours from now!
iTimothea: Johnny, How do you see this partnership benefiting KuCoin users, and beyond?
Johnny: The partnership benefits KuCoin users by giving them early exposure to a project that can potentially change the crypto landscape. Offering a decentralized solution to centralized liquidity that normally wouldn't be accessed by the DeFi community is huge! This liquidity would normally go untapped, but with Orion, this liquidity will now be accessed by one of the largest growing communities in the crypto space.
Timothea: And Alexey, how do you see this partnership benefitting Orion users, and the industry as a whole?
Alexey: I mentioned earlier that our goal is to provide access to all the benefits and opportunities of the crypto landscape, in a decentralized way. That’s why we don’t compete with exchanges (centralized or decentralized), but aggregate their orderbooks into one decentralized terminal - giving traders access to the entire crypto market in one place.
It's mutually beneficial, though: rather than taking users away from their exchanges, we’re providing another point of access to their liquidity, allowing users to trade across exchanges they don’t even have accounts with.
Therefore, the richer our partnerships, the richer the trading experience on Orion Protocol. KuCoin will enrich the Orion ecosystem with increased liquidity for spot trading, margin trading, leveraged ETF and contract trading services, as well bringing as a large and valuable community for PoS staking services. We’re incredibly excited for this partnership and what’s in-store!